What really is turning around a company?

This Week's Business Week had a cover story about how private equity companies are extracting unearned fees from companies they buy. In far more cases companies are being revitalized and renewed. Turning around a company is not easy, but neither is it new. American Standard was one of the great turnarounds of the 1970s, but successful turnarounds were extremely rare until the past 20 years. In the past, almost inevitably, a company in decline was irretrievably doomed. The existence of Chapter 11 in the US (most other countries only have some form more similar to Chapter 7), encouraged management (even if it is new management) to try to fix the company.

However, a true turnaround is not just cosmetic, but repositioning the company for future growth. Continental Airlines is such an example, and Chrysler certainly seemed to be that, though the changes may have not been deep enough.